Wednesday, 26 November 2008

Domino's Responds to Aggressive Pizza Hut Adverts

Domino’s Pizza is hitting back at Pizza Hut’s confrontational new ad campaign, saying customers will remember how they were treated when the company held a dominant market share.

Domino chief executive Don Meij says the ads, which include direct comparisons between Pizza Hut and Domino’s products, won’t affect the rapid growth of his company.

“Five years ago Pizza Hut had the whole market to themselves. When you have a monopoly you probably don’t do everything in favour of the customer,” he says.

“Pizza Hut was pricing at Hell [Pizza] pricing but had an everyday pizza. And the customers reacted.”

Mr Meij says Pizza Hut’s recent changes, which include cheaper prices, the revival of the “jumbo” size pizza, and the afore-mentioned marketing campaign, won’t be enough to change its image with consumers.

“Pizza Hut’s still Pizza Hut, it has many other things it needs to correct with itself.

“People remember if you behave badly. It’s the same for us. If we do things wrong, customers remember,” he says.

Domino’s is listed on the ASX and has 74 stores operating under a franchise model in New Zealand.

Pizza Hut, also a franchise, is part of NZX-listed Restaurant Brands. Mr Meij says Domino’s is still looking to expand, and thinks there is room for 85-89 stores in this market.

“New Zealand continues to fly ahead, really strong growth. We haven’t really seen any effects from the economy,” he says.

Eight new stores will open between now and June next year, which will all be fitted out with a refreshed store format.

Stores that are currently operating will also be refitted, starting from next March.

The chain’s most popular pizza – the Meatosaurus, which has four types of meat and barbeque sauce – reflects its skew towards male customers.

Next year, Mr Meij says, Domino’s will be launching some new healthier products pitched at women aged over 25.

“Domino’s is a treat: we’re not going to be bringing out Weight Watchers products or anything like that.

“But you’ll see things that continue to be better for you, and have some shift to a more female feel in the way we present and offer them,” he says.


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